Scraps about soft and hard Brexit smack of punch-ups between cartoon-strip antagonists more or less keen on the referendum outcome . But this masks a more subtle distinction between judgements about risk. Let us put the best face on the arguments for a gradual, possibly staged departure from the EU, including those on this site led by my good friend, Sam Bowman. These are
- a summary departure would hurt industry and finance;
- our relations with the EU are too complex for a rapid departure ;
- Northern Ireland, Scotland and the 48% would be mollified by a halfway house.
Unfortunately, however, I fear this halfway house is a pipe-dream. Brussels can’t offer a better deal on sovereignty, the number one objective of Leavers, as any concession would be demanded by other countries. And the EEA doesn’t give border security, the Leavers’ second objective, no matter how we may feel personally. In this light, the highest priority for the government becomes reducing the level of Brexit insecurity all round.
- In the nature of things, industry and finance adjust to new conditions but both run the risk of freezing (eg hiring and investment decisions) in the face of prolonged uncertainty.
- The European s themselves will welcome being let off prolonged Brexit negotiation so they can turn to their many other problems.
- A definitive outcome offers a similar balance of benefits to Northern Ireland, Scotland and the 48%.
HMG can achieve this with a childishly simple negotiating position – a no-fault quickie divorce, by way of time-limited offers of the status quo ante
- on goods, or failing which unilateral zero tariffs (subject to reservations for antidumping etc). The latter would make it imperative upon Brussels to reciprocate. If it were bonkers enough to fail to do so, the EU would break up as its leading members would not tolerate losing their single largest external trading partner; and
- on services, failing which reciprocity, reminding (eg) the Quai d'Orsay of the benefits of access to the UK’s service markets for AXA, BNP, EDF, RATP and Veolia.
plus a couple of financial offers
- a one-time only sum (in the billions) for the UK’s share of the net of pension obligations etc less tangible assets; and
- a periodical sum (in the tens or low hundreds of millions) for Erasmus and other such motherhood and apple pie.
The time-limited aspect of HMG’s offer should be sustained by a clause in the Great Repeal Bill empowering HMG to exercise its rights under the Vienna Convention on Treaties to bring negotiations to a summary conclusion for lack of a serious intent to negotiate by the other side. As this would leave the financial offers unaccepted, HMG would throw in payment to an escrow lodged with the BIS or the like.
HMG should be briefing international firms (American banks, the big Anglo-Dutch players, French, German and Dutch state-owned transport outfits, French quoted government contractors, Japanese carmakers etc) to the effect that if they value their operations in the UK, it is up to them to lobby the EU to respond positively. So too European exporters to the UK. Overall, however, HMG would be after an abbreviated negotiating period to minimise uncertainty and bring on dealings with third parties.
Miles Saltiel has just published a collection of thirty-odd blogs circulated to insiders during and after the referendum campaign, as “The Brexit Blogs” a Kindle e-book.